Extended warranty might extend nothing but your debt

An extended warranty sounds like a good idea. Pay just a little more and you’ll have peace of mind knowing your air fryer has extra cover. Or your washing machine, coffee maker or other shiny new purchase.

But when it comes to that extended warranty, all may not be as it seems. In many cases, the only thing extended is your arm, further into your hip pocket. The truth is, many so-called extended warranties provide you with no more protection than you already have through Australian law.

Unfortunately, the majority of Australian consumers wrongly believe purchasing an extended warranty gives them extra protection beyond their existing rights. Seven out of 10 Aussies think that paying extra provides them more protection than Australian Consumer Law (ACL).

In some cases they may be right, but often the consumer is buying peace of mind, which should already exist. And many Australians do go down this path. A new CHOICE survey shows that 32 per cent of Australians have bought an extended warranty in the past two years.

It’s likely that a fair proportion of those have paid for rights they already had under ACCC regulations.

How do you know if your extended warranty really provides further protection?

A good retail outlet will provide you with those details, but there are many that do not. The easiest thing you can do is ask the seller what the extended warranty provides over and above ACL. If the seller is unable to answer that question, it’s worth being hesitant.

One thing you can do is familiarise yourself with the law before making a purchase. This does not necessarily mean reading through thousands of pages of legislation. The ACCC’s website has a number of easy-to-read pages providing an overview of warranties. There’s even a downloadable PDF guide, Consumer Guarantees – A guide for consumers.

You might think putting in all that research is barely worth it for the purchase of a single product. If the next product you buy is your last-ever purchase you might be right. But if you plan on being a consumer for a few years yet, the time taken now could save time, money and heartache down the track.

Getting down to specifics, an offer to extend a standard one-year warranty to two years is likely not worth it. In most cases, two years’ protection against faults (not of your doing) will be provided by ACL.

Apple Software provides a good example of this. Several years ago some customers tried to claim replacement iPhones for defects that had occurred after more than a year. Initially knocked back, they were able to demonstrate that ACL guaranteed replacement until at least the two-year mark.

Apple now has a dedicated page outlining its policy around warranties and extended warranties. The software giant even acknowledges that in some cases protection lasts longer than two years. “Apple acknowledges that the Australian Consumer Law may provide for remedies beyond 24 months for a number of its products.”

Not just Apple

Apple might be rare in acknowledging this, but it is not alone in its responsibilities. For example, a television that suffers a major fault more than 24 months after purchase can still be covered. And that’s even without an extended warranty.

The details here can get a little murky, as the ACCC guidelines use the term ‘reasonable time’. That can mean different things to different people – especially retailers and consumers. But the ACCC acknowledges that it will depend on the goods or services sold.

Nevertheless, in the case of a large appliance such as a television, it’s generally accepted that ‘a few years’ is reasonable. What the exact figure is would come down to negotiation between consumer and retailer.

Another often unmentioned consumer right is full replacement rather than repair. In many cases under ACL, it is the consumer’s right to decide if they would prefer repair or replacement.

So the next time you make a significant purchase, think twice about paying extra for an extend warranty. And if you feel you’re being pressured into buying one, remind them that the following statement is enshrined under ACL:

“Businesses must not pressure or mislead consumers to buy an extended warranty.”

Do you usually take up the offer of an extended warranty? Were you aware of how much protection ACL provides? Let us know via the comments section below.

Also read: How to buy energy efficient appliances

Andrew Gigacz
Andrew Gigaczhttps://www.patreon.com/AndrewGigacz
Andrew has developed knowledge of the retirement landscape, including retirement income and government entitlements, as well as issues affecting older Australians moving into or living in retirement. He's an accomplished writer with a passion for health and human stories.


  1. Yes I do use extended warranties if they provide a long extension. Currently I have a TV and Refrigerator both with three year manufacturer warranties plus a four year purchased extended warranty making seven years in total. Both are for repair or replace.
    As in my experience few things last longer than seven years any more I think these are worthwhile. I have had past experience of an extended warranty getting me a brand new product after the original one failed beyond repair. The replacement was a newer better model as well since the original was no longer made.

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